Overview:

Philippine Downstream
Oil Industry and Pricing

Hideliza V. Ludovice

ENERGY CONSUMERS AND STAKEHOLDERS’ CONFERENCE 2017

THEME: “E-Power Mo! Smart Energy Utilization
Forum and Stakeholders Conference”

29 November 2017
Fontana Hot Spring Leisure Parks
Clark Freeport Zone, Pampanga.
Department of Energy
Empowering the Filipinos
 Presentation Outline

Department of Energy
Empowering the Filipinos
 Downstream Oil Industry Chain
Product Exports

Product Imports
Crude Imports

Biofuels*

Refinery

LPG Refillers

Depots Import/Export Terminals Industrial/Commercial

End-Users

Foreign vessel
Tanker/Barges
LPG Dealers Tank Trucks
Pipeline
Foreign vessel
(Imports)*
Tank Truck (Local)*
Product Imports
Auto LPG Station
LPG Retail Outlets

Industrial/Commercial
Liquid Fuel Retail Outlets
End-Users
Department of Energy
Empowering the Filipinos
 Regulatory
Framework

Department of Energy
Empowering the Filipinos
 Mandate

To ensure a truly
Republic Act No. 8479 competitive market under
a regime of fair prices,
adequate and continuous
‘An Act Deregulating the supply of
Downstream Oil Industry, environmentally-clean
and for other Purposes’ and high quality
petroleum products.

Department of Energy
Empowering the Filipinos
 Regulatory Framework – Oil Industry

• RA 7638 – DOE Act of 1992

• RA 8479 – Oil Deregulation Act of 1998
Republic • RA 8749 – Clean Air Act of 1999
• RA 9367 – Biofuels Act of 2006
Acts • RA 9513 – Renewable Energy Act of 2008
• RA 8184 – Excise Tax
• RA 9337 – RVAT Law of 2005

Batas • BP 33 – Prohibited Acts/Penalties Involving Petroleum

Pambansa

• Implementing Issuances:
Executive • DOE Circulars
Orders • BIR Revenue Regulations
• BFP Rules and Regulations

Department of Energy
Empowering the Filipinos
 Regulatory Framework – Role of DOE Units

DOE - OIMB
• Monitoring fuel quality/quantity, refining/marketing process, inventory, price
• Registration/Engagement in any downstream oil activity
• Fuel Quality Standard Setting
• Petroleum Facilities Standard Setting
• Regulate as necessary
DOE - REMB
• Accreditation & Monitoring of Biofuels Manufacture
• Transition Secretariat for National Biofuels Board (NBB)

DOE - ERTLS
• Laboratory testing of samples
DOE - Legal Services
• Processes findings of violations
Department of Energy
Empowering the Filipinos
 Regulatory Framework – Taxation

March 02, 2017

BRIEFING ON THE OIL INDUSTRY

(Venue)
Department of Energy (Date)
Empowering the Filipinos
 Oil Industry
Situation

Department of Energy
Empowering the Filipinos
 1H 2017 Production / Demand Mix

Production (200.3 MBCD)/ Demand (447.9 MBCD) %Mix

7.0 11.0 LPG

24.3 23.4 GASOLINE

POWER GENERATION 5.68

10.3 11.3 AVTURBO/
INDUSTRY 7.11
TRANSPORT 63.99 KEROSENE
RESIDENTIAL 7.68
COMMERCIAL 8.66
AGRICULTURE 1.11 36.8 41.2 DIESEL
OTHERS, NON-ENERGY 5.76
TOTAL DEMAND 100.00

CRUDE 6.1 6.5 FUEL OIL

15.0 6.8

Department of Energy
Empowering the Filipinos
 1H 2017 Oil Imports By Country of Origin

USA Others Malaysia Japan

Vietnam Algeria Russia
0.5% 0.03% 2.0%
0.6% 1.2% Angola 0.8% 7.8%
0.3%
Qatar KSA Taiwan Australia
1.1% 0.9% 3.2% Australia 2.8%
1.3%
PNG Phil.
1.2% Singapore
0.2% UAE Saudi Arabia
12.3%
Pakistan 15.6%
0.7% China 34.9%
Oman 35.3%
0.2% Qatar
Malaysia Kuwait 5.6%
Korea
5.3% 22.4% 28.4%
India
Japan 4.2%
Kuwait 4.7%
0.9%

Oman
E. Guinea 2.0%
0.5%
Indonesia
0.7%

PRODUCT IMPORTS CRUDE IMPORTS

48,592 MB 35,759 MB

Department of Energy
Empowering the Filipinos
 Market Share

Petron Chevron Shell Others Direct Imports

6.81% 7.19% 8.04% 8.96%

30.08 MBCD 30.63 MBCD 34.15 MBCD 40.11 MBCD

36.16% 34.63%
34.17% 35.0%
159.72 MBCD 147.55 MBCD
145.09 MBCD 156.74 MBCD
30.25% 30.89% 30.73% 28.64%
133.58MBCD 131.60MBCD 130.48MBCD 128.29MBCD
20.22% 20.61%
20.31%
89.31 MBCD 87.81 MBCD 20.70%
86.24 MBCD
92.68 MBCD

6.56%
28.96 MBCD 6.68% 6.75% 6.71%
28.45 MBCD 28.67 MBCD 30.04 MBCD

YTD June 2016 YTD Sep 2016 FY 2016 YTD June 2017
441.66 MBCD 426.05 MBCD 424.63 MBCD 447.85 MBCD

Department of Energy
Empowering the Filipinos
 LPG Market Share - YTD June 2017
Petronas
1.01%

S. Pacific Petronas
20.04% 20.20%
Pryce
Liquigaz 23.69%
Petronas Petron
29.28% 32%
4.62% Petronas
Shell 0.04% Shell Isla Gas Petron,
0.20% 0.54% Isla Gas 16.63% 39.45%
17.56% Others
S.
S. Pacific Pacific
0.12%
12.10% Others
Pryce Gas 13.79%
12.77% Liquigaz
S. Luzon 0.04%

29.5% 1,591.7 MB
Petron
Visayas
Petron
Liquigaz 31.46% 37.27% 1,046.4 MB
23.55% Isla Gas
10.42%
S. Pacific
Petronas
14.16%
Others Others 22.28%
Isla Gas 0.11%
8.45% Pryce Petron Pryce
12.08% 31.98% 16.45% 25.64%
Others NCR Petron
3.22%
3,316.6 MB 35.57%
Liquigaz Isla Gas
Total Country 30.66% Isla Gas 16.37%
6.64%
8,890.2 MB Others
0.14%
N. Luzon
2,118.1 MB Mindanao
817.4 MB

Sep 15, 2017

Department of Energy
Empowering the Filipinos
 New Players’ Gas Stations
Flying V 314
LUZON
1,870 Total Phils. 193
3,180
2,144 Unioil 42
3,804
2,521 Seaoil 262
3,936 Jetti 54
2,321
2,449 PTT/SBDI 52
LUZON 2,645 Eastern 35
City Oil
VISAYAS Metro Oil Subic 20
614 786 Uno Fuel 18
576 1,041 Nation Petroleum
617 1,067 USA 88 7
532
Filoil Gas Co.Inc 101
636
Phoenix 298
669
VISAYAS Independent 1,080
TOTAL 2,476
MINDANAO D ec. 2 0 11 1,0 19
576 1,031 D ec. 2008 741
D ec. 2007 738
577 1,243 D ec. 2006 602
608 D ec. 2005 506
1,261
D ec. 2004 755
619 D ec. 2003 661
MINDANAO 652 D ec. 2002 564
800 D ec. 2001 4 11
Total (1996) = 3,060 D ec. 2000 276
Total (2005) = 3,369 Total (2012) = 4,997 D ec. 19 9 9 112
Total (1999) = 3,297 Total (2008) = 3,737 Total (2013) = 6,088
Total (2002) = 3,746 Total (2011) = 4,114 Total (2015) = 6,264
Department of Energy
Empowering the Filipinos
 Investments of New Players after R. A. 8479
(as of June 2017)

NUMBER OF PLAYERS INVESTMENTS

ACTIVITY (In operation) (In Billion Pesos)
Liquid Fuel Bulk
Marketing 219 17.36

Fuel Retail Marketing 11 14.31

LPG Bulk Marketing 11 14.36

Terminaling 12 8.82

Bunkering 19 2.61

TOTAL 272 57.46

Department of Energy
Empowering the Filipinos
 Oil Pricing

Department of Energy
Empowering the Filipinos
 Oil Situation in the Philippines
- Price Decontrol
DOE price monitoring and assessment
• International prices, i.e. Daily MOPS Dubai,
gasoline, diesel, kerosene, and monthly CP of LPG
• Retail prices in Metro Manila and key cities of Luzon,
Visayas and Mindanao

Oil companies set local prices

• For gasoline, diesel, etc. – industry players reflect weekly
MOPS movements in local prices
• For LPG, movements in the CP are quickly reflected in the
domestic market on the first week of the month
• Independent oil marketers exercise freedom of choice
(shop around for lowest price or enter into supply contracts)

Department of Energy
Empowering the Filipinos
 Local Oil Pricing – Cost Components
FOB Tax-paid Landed Cost
+ Freight + Refining Cost (for crude)
+ Insurance + Storage/Handling/Marketing Costs
+ Oil Company's Profit
CIF + VAT
+ Import duty Direct Oil Company Take
+ Specific tax + Transhipment Cost
+ Port chargers + Profit Margin
+ Other imposts + VAT for local sale
+ VAT
Wholesale Posted Price
Tax-paid Landed Cost
+ Hauling Charge
Some consider ANYTHING BEYOND + Dealer's Mark-Up
the TAX-PAID LANDED COST (TPLC) + VAT
as OVERPRICING. But such does
not consider the local costs… Pump Price
Department of Energy
Empowering the Filipinos
 Oil Pricing – ERB Formula

Department of Energy
Empowering the Filipinos
 Oil Pricing – After Landed Cost
GASOLINE PRICE ANALYSIS
International Content of the Pump Price
Sept 2017 MOPS Gasoline (FOB) 67.58
Add: Freight 2.00
CNF, $/bbl 69.58
Forex 50.99
CNF, P/lit 22.31

International
Gasoline
Content Local Content
Concerned Area Actual Price
(CNF)
Sep 30, 2017
Amount Excise Tax VAT Industry Take
Manila 46.35 22.31 4.35 4.97 14.72
North Luzon
La Trinidad Benguet 55.77 22.31 4.35 5.98 23.13
Tuguegarao Cagayan 45.00 22.31 4.35 4.82 13.51
Vigan Ilocos Sur 45.42 22.31 4.35 4.87 13.89
San Fernando La Union 44.25 22.31 4.35 4.74 12.84
Lingayen Pangasinan 42.85 22.31 4.35 4.59 11.59
San Fernando Pampanga 47.95 22.31 4.35 5.14 16.15
Bulacan 47.40 22.31 4.35 5.08 15.66

Department of Energy
Empowering the Filipinos
 Oil Pricing – After Landed Cost
DIESEL PRICE ANALYSIS
International Content of the Pump Price
Sept 2017 MOPS Diesel (FOB) 69.14
Add: Freight 2.00
CNF, $/bbl 71.14
Forex 50.99
CNF, P/lit 22.81

International
Diesel
Content Local Content
Concerned Area Actual Price
(CNF)
Sep 30, 2017
Amount Excise Tax VAT Industry Take
Manila 34.15 22.81 0.00 3.66 7.68
North Luzon
La Trinidad Benguet 36.93 22.81 0.00 3.96 10.16
Tuguegarao Cagayan 34.61 22.81 0.00 3.71 8.09
Vigan Ilocos Sur 32.02 22.81 0.00 3.43 5.78
San Fernando La Union 32.62 22.81 0.00 3.50 6.31
Lingayen Pangasinan 34.80 22.81 0.00 3.73 8.26
San Fernando Pampanga 34.44 22.81 0.00 3.69 7.94
Bulacan 33.65 22.81 0.00 3.61 7.23

Department of Energy
Empowering the Filipinos
 In Closing

Department of Energy
Empowering the Filipinos
THE GOVERNMENT CANNOT DO IT ALONE…..

The DOE recognizes that there are always rooms for

improvement. The Department will always seek the
wisdom of the lawmakers, as well as its stakeholders,
on how the law, and its implementing rules, can be
improved.

The DOE therefore delivers its full commitment to

finding solutions which will better serve our
consumers.

KAYANG-KAYA KUNG
SAMA-SAMA !
Department of Energy
Empowering the Filipinos
 WE NOTE: DOE’s mandate is far beyond
just oil pricing
POLICY : ENSURE STABLE SUPPLY OF ENERGY
GOALS:

To ensure oil supply security – sufficient, stable, accessible &

quality

To conduct technical, economic and social assessment

and studies to ensure continuous and stable supply of oil.

To promote efficiency and safety in supply and

distribution chain

To reduce dependence on imported fuel

To promote awareness on the downstream oil industry

initiatives and developments.

Department of Energy
Empowering the Filipinos
 Information at DOE website
Other Information on the
Oil Pricing Information: Downstream Oil Industry:

Oil Monitor Industry Structure

Pricing Formula Regulatory Framework

Promotion of Free
Retail Pump Prices
Market Atmosphere

LPG/Auto-LPG Prices Benefits of Deregulation

Price Adjustments Competition

List of Stations Standard Formulation and

Offering Discount Enforcement
Reportorial
Oil Supply Demand Report
Requirements

Reportorial Requirements
Department of Energy
Empowering the Filipinos
 Thank You !

(+632) 840-2187
hideliza.ludovice@doe.gov.ph
www.doe.gov.ph
//doe.gov.ph
@doe_ph

Department of Energy
Empowering the Filipinos